Whether you’re moving to Switzerland or leaving for another country, you want to continue saving for your retirement. When transferring to a new pension system, there are several points to remember.
1. Move to Switzerland and build on three pillars
When you move to Switzerland, you can continue your retirement planning in a new system. By paying into pillars 1 and 2, you have the right to receive their benefits. You also have the option to make tax-efficient retirement savings under pillar 3.
Three pillars, one goal – financial security in old age, or on disability or death
Retirement provision under pillar 1
The size of your AHV pension depends on the number of contribution years and the amount you've paid in. Under the pay-as-you-go system, your personal AHV contributions are not put aside for you, but are used to pay the pensions of people currently drawing an AHV pension. A direct deduction of 5.15% of your salary is made for this. Your employer will top up this payment by the same amount. If you are self-employed, you can find information on how pillar 1 applies to you under: Self-employment and succession.
Retirement provision under pillar 2
Under your occupational scheme, you save for yourself and the funds you pay in accrue interest. Above an annual salary of CHF 21, 150 (as at 2015), your employer is obliged to organize occupational retirement provision for you. Depending on your age, salary and pension fund, a certain percentage will be deducted from your salary. Your employer will contribute at least the same amount. You will receive an annual pension fund statement and regulations, which provide you with information on the status of your assets and your retirement, disability and death benefits.
Voluntary purchases allow you to close any gaps in your retirement savings and improve your benefits. For those moving to Switzerland who have never been a member of a Swiss pension fund, annual purchases in the first five years may not exceed 20% of their insured salary.
Retirement provision under pillar 3
Private retirement savings under pillar 3a represent your personal retirement provision and are your own responsibility.
- You benefit from preferential rates of interest and tax concessions, as the payments can be deducted from your taxable income.
- If you are a member of a pension fund, you may pay in up to CHF 6, 768 (as at 2015).
- You may withdraw pillar 3a funds early to finance your own owner-occupied home in Switzerland.
- The capital can be withdrawn five years before the normal AHV retirement age, or if you definitively leave Switzerland, or if you become self-employed.
- If you live in Switzerland, you can also take advantage of tax-privileged savings under pillar 3a if your income is taxed at source.
You can find an initial overview of the options available to you at: Tax savings with pillar 3a.
If you want to fully maintain your normal standard of living in retirement, the benefits available under pillars 1 and 2 will barely be enough. In addition to pillar 3a, you can also cover any income gaps with pillar 3b. Depending on your investor profile, there are a variety of options available to you for capital investment.
We would be happy to advise you and help you to make the right decisions.
2. Leave Switzerland and remain covered
If you move away, you can still take advantage of AHV/IV benefits in line with the contributions you have made. Capital saved under your occupational and private pension schemes may be withdrawn subject to the legal regulations when you leave Switzerland definitively, although withholding tax will be due.
What is the situation with pillar 1?
You are no longer obliged to be insured. You can insure yourself voluntarily:
- if you have Swiss citizenship or are a citizen of an EU/EFTA state and
- you take up residence outside the EU/EFTA zone and
- you were insured for five unbroken years under the AHV before leaving.
The application must be made within one year.
What is the situation with pillar 2?
Under certain circumstances you can withdraw your retirement savings.
- Obligatory pension fund assets – it is not possible to withdraw the statutory component if you are moving to an EU/EFTA country and are subject there to mandatory insurance for old age, disability and death. The assets remain in Switzerland and must be transferred to a blocked account (e.g. to a UBS vested benefits account). These assets can be withdrawn five years prior to the normal AHV retirement age at the earliest.
- You can withdraw nonmandatory pension fund assets without restriction on moving away.
What is the situation with pillar 3?
You can withdraw your retirement savings from pillar 3a without restriction.
We would be happy to assist you to find an appropriate solution.